The Growing Threat of Council Tax Rebanding in HMOs
Council tax rebanding has emerged as one of the most pressing threats to HMO (House in Multiple Occupation) operators in the UK. Once an occasional issue, it is now rapidly spreading across the country—turning what was once considered shared accommodation into individual “dwellings” subject to separate council tax charges. This trend isn’t just hitting landlords in the pocket—it’s also confusing and financially burdening tenants, especially those from Gen Z who are increasingly opting for co-living models.
Darren Brewer, founder of ProPods and co-founder of the HMO Council Tax Reform Group, has seen this issue grow firsthand. With over 75 co-living bedrooms under management in Portsmouth, he is on the frontline of a problem that is now national in scale.
Why Rebanding is Dangerous—and Often Unfair
Originally, council tax was designed around single-family homes. A typical three-bedroom house shared by a family of five might fall under a Band B or C. However, when the same property is converted into an HMO, local authorities—driven by opaque policies and inconsistently applied standards—are now attempting to tax each room individually, treating them as separate dwellings.
This means that what was once a single band (e.g., £1,400/year) might now become five or six Band A charges (approximately £400 per room), pushing the total cost closer to £2,400. In practice, that burden gets passed on to tenants, many of whom are already struggling with rising rents and cost of living.
From Darren’s perspective, this rebanding is not only inconsistent across councils but also confusing for everyone involved—especially tenants who suddenly become responsible for a bill they weren’t prepared for.
The Legal Backstory: From Poll Tax to Council Tax Chaos
The policy underpinning council tax stems from legislation dating back to the Local Government Finance Act of 1992. This replaced the much-hated poll tax, a policy so controversial it sparked riots and political upheaval. Council tax valuations were backdated to 1991 property values—a system that, astonishingly, is still being used today to calculate bands.
Darren explains that during the early 1990s, estate agents literally drove through streets estimating property values to assign tax bands. Over the decades, the Valuation Office Agency (VOA) and its listing officers were granted more powers—but no updated policy to reflect how dramatically the housing market and living arrangements have changed.
The result? An outdated system weaponized against modern HMO living.
Common Myths—and Why They Don’t Work Anymore
Many landlords have tried to avoid rebanding with tactics like:
- Avoiding en-suites
- Sticking to four-bed properties or fewer
- Using license agreements instead of tenancy agreements
- Converting only residential properties
However, Darren makes it clear: none of these strategies consistently protect against rebanding anymore. Even three-bedroom HMOs and properties without en-suites are now being reclassified. Even license agreements—once considered a potential loophole—are increasingly dismissed by the VOA.
In other words, no HMO is truly safe from scrutiny.
The Harsh Reality: Be Prepared, or Be Burned
Darren recounts how ProPods faced a major tribunal after one of his buildings was reclassified. Despite submitting 360 pages of evidence and enduring a five-hour hearing, the tribunal sided with the VOA. They considered escalating to the High Court, but the legal fees—estimated at £70,000 with no guarantee of success—were prohibitive.
What’s worse, once rebanding hits, landlords are forced to issue new tenancy agreements and pass on tax responsibility to tenants—often creating conflict, confusion, and reputational damage.
This isn’t just a landlord problem. It’s an issue that affects the entire shared housing ecosystem.
The HMO Council Tax Reform Group
Recognizing the systemic nature of this problem, Darren and Wendy Whittaker-Large co-founded the HMO Council Tax Reform Group. What began as a Facebook group with just the two of them has now grown to over 1,150 members—and continues to expand rapidly.
The group is taking an active role in lobbying the UK government. They’re advocating for one clear policy change: a bedroom should not be classified as a dwelling. If that single line of legislation can be updated, it could shield thousands of landlords—and millions of tenants—from the financial harm caused by rebanding.
Their efforts include:
- Building a strong landlord network
- Providing resources and updates on council tax cases
- Working with legal experts like barrister Alan Murdy, the UK’s top authority on council tax legislation
- Engaging with MPs and policymakers (when they stay in office long enough)
Darren and Wendy have also built a website where landlords can learn more, join the group, and contribute to the fight.
The Bigger Picture: A Broken System That Needs Reform
What’s especially alarming is how rebanding contributes to a misleading national housing narrative. Every rebanded HMO room gets added to the UK’s official housing stock figures—even though they were never intended as standalone dwellings. With 497,000 registered HMOs in the UK and an average of six rooms each, that could mean millions of “phantom dwellings” being counted.
This inflates housing data, skews policy decisions, and allows local authorities to profit from outdated rules—all while providing no real benefit to residents.
What Landlords Can—and Should—Do Now
Darren doesn’t sugarcoat the truth: there’s no guaranteed workaround, and no silver bullet. But there are steps every landlord can take:
- Join the HMO Council Tax Reform Group: Knowledge is power, and collective lobbying is the best hope for change.
- Prepare your portfolio: Have contingency plans for tenant communication and legal restructuring in case of rebanding.
- Stay informed: Follow the latest tribunal decisions, government announcements, and policy developments.
Contribute to the cause: Lobbying takes time and resources. Financial support helps the group maintain legal pressure and visibility.
The Time to Act Is Now
Council tax rebanding isn’t a future threat—it’s happening now. As Darren warned, “the train has left the station.” Whether you’re actively expanding your portfolio or managing a long-established HMO, the risk is real.
The good news? Landlords are not powerless. Through community, lobbying, and awareness, there’s still a path forward. Visit the HMO Council Tax Reform Group website, join the movement, and be part of the change needed to protect shared housing for the next generation.
The Growing Threat of Council Tax Rebanding in HMOs
Council tax rebanding has emerged as one of the most pressing threats to HMO (House in Multiple Occupation) operators in the UK. Once an occasional issue, it is now rapidly spreading across the country—turning what was once considered shared accommodation into individual “dwellings” subject to separate council tax charges. This trend isn’t just hitting landlords in the pocket—it’s also confusing and financially burdening tenants, especially those from Gen Z who are increasingly opting for co-living models.
Darren Brewer, founder of ProPods and co-founder of the HMO Council Tax Reform Group, has seen this issue grow firsthand. With over 75 co-living bedrooms under management in Portsmouth, he is on the frontline of a problem that is now national in scale.
Why Rebanding is Dangerous—and Often Unfair
Originally, council tax was designed around single-family homes. A typical three-bedroom house shared by a family of five might fall under a Band B or C. However, when the same property is converted into an HMO, local authorities—driven by opaque policies and inconsistently applied standards—are now attempting to tax each room individually, treating them as separate dwellings.
This means that what was once a single band (e.g., £1,400/year) might now become five or six Band A charges (approximately £400 per room), pushing the total cost closer to £2,400. In practice, that burden gets passed on to tenants, many of whom are already struggling with rising rents and cost of living.
From Darren’s perspective, this rebanding is not only inconsistent across councils but also confusing for everyone involved—especially tenants who suddenly become responsible for a bill they weren’t prepared for.
The Legal Backstory: From Poll Tax to Council Tax Chaos
The policy underpinning council tax stems from legislation dating back to the Local Government Finance Act of 1992. This replaced the much-hated poll tax, a policy so controversial it sparked riots and political upheaval. Council tax valuations were backdated to 1991 property values—a system that, astonishingly, is still being used today to calculate bands.
Darren explains that during the early 1990s, estate agents literally drove through streets estimating property values to assign tax bands. Over the decades, the Valuation Office Agency (VOA) and its listing officers were granted more powers—but no updated policy to reflect how dramatically the housing market and living arrangements have changed.
The result? An outdated system weaponized against modern HMO living.
Common Myths—and Why They Don’t Work Anymore
Many landlords have tried to avoid rebanding with tactics like:
- Avoiding en-suites
- Sticking to four-bed properties or fewer
- Using license agreements instead of tenancy agreements
- Converting only residential properties
However, Darren makes it clear: none of these strategies consistently protect against rebanding anymore. Even three-bedroom HMOs and properties without en-suites are now being reclassified. Even license agreements—once considered a potential loophole—are increasingly dismissed by the VOA.
In other words, no HMO is truly safe from scrutiny.
The Harsh Reality: Be Prepared, or Be Burned
Darren recounts how ProPods faced a major tribunal after one of his buildings was reclassified. Despite submitting 360 pages of evidence and enduring a five-hour hearing, the tribunal sided with the VOA. They considered escalating to the High Court, but the legal fees—estimated at £70,000 with no guarantee of success—were prohibitive.
What’s worse, once rebanding hits, landlords are forced to issue new tenancy agreements and pass on tax responsibility to tenants—often creating conflict, confusion, and reputational damage.
This isn’t just a landlord problem. It’s an issue that affects the entire shared housing ecosystem.
The HMO Council Tax Reform Group
Recognizing the systemic nature of this problem, Darren and Wendy Whittaker-Large co-founded the HMO Council Tax Reform Group. What began as a Facebook group with just the two of them has now grown to over 1,150 members—and continues to expand rapidly.
The group is taking an active role in lobbying the UK government. They’re advocating for one clear policy change: a bedroom should not be classified as a dwelling. If that single line of legislation can be updated, it could shield thousands of landlords—and millions of tenants—from the financial harm caused by rebanding.
Their efforts include:
- Building a strong landlord network
- Providing resources and updates on council tax cases
- Working with legal experts like barrister Alan Murdy, the UK’s top authority on council tax legislation
- Engaging with MPs and policymakers (when they stay in office long enough)
Darren and Wendy have also built a website where landlords can learn more, join the group, and contribute to the fight.
The Bigger Picture: A Broken System That Needs Reform
What’s especially alarming is how rebanding contributes to a misleading national housing narrative. Every rebanded HMO room gets added to the UK’s official housing stock figures—even though they were never intended as standalone dwellings. With 497,000 registered HMOs in the UK and an average of six rooms each, that could mean millions of “phantom dwellings” being counted.
This inflates housing data, skews policy decisions, and allows local authorities to profit from outdated rules—all while providing no real benefit to residents.
What Landlords Can—and Should—Do Now
Darren doesn’t sugarcoat the truth: there’s no guaranteed workaround, and no silver bullet. But there are steps every landlord can take:
- Join the HMO Council Tax Reform Group: Knowledge is power, and collective lobbying is the best hope for change.
- Prepare your portfolio: Have contingency plans for tenant communication and legal restructuring in case of rebanding.
- Stay informed: Follow the latest tribunal decisions, government announcements, and policy developments.
Contribute to the cause: Lobbying takes time and resources. Financial support helps the group maintain legal pressure and visibility.
The Time to Act Is Now
Council tax rebanding isn’t a future threat—it’s happening now. As Darren warned, “the train has left the station.” Whether you’re actively expanding your portfolio or managing a long-established HMO, the risk is real.
The good news? Landlords are not powerless. Through community, lobbying, and awareness, there’s still a path forward. Visit the HMO Council Tax Reform Group website, join the movement, and be part of the change needed to protect shared housing for the next generation.
